Citrix's new licensing scheme could cause price pain

XenDesktop 4.0, which bundles desktop and server licensing, has a new pricing model that moves from concurrent to named licenses. But customers may not be happy with the cost.

The big news in the desktop virtualization industry last week was that Citrix revealed plans for Version 4 of XenDesktop.

While Version 4 (which will be released in the end of November) will add several new features, all the buzz in the industry has been around the fact that Citrix implemented a major change to the way its product is licensed.

Current versions of XenDesktop are licensed based on the number of concurrent users who are using the system at any given time. Moving forward, Citrix will license XenDesktop based on the total number of users who will access the system. In other words, Citrix is moving from a "concurrent-user" basis to a "named-user" basis.

For example, imagine you have 1,000 employees who access your XenDesktop farm. If only 200 people ever use it simultaneously, the old system required 200 licenses, while the new one requires 1,000 licenses.

Citrix claims that this new licensing model is more consistent with how customers use the product today.

"XenDesktop is a desktop-replacement technology," said Citrix vice president Sumit Dhawan. "So the concurrent model doesn't really make sense when you're talking about all your users. Per user is just simpler."

But members of the community don't necessarily agree, as there are plenty of examples of customers who use XenDesktop for their out-of-office flex workers, for remote access and for disaster recovery.

In order to sweeten the new per-user deal, Citrix has bundled the full version of the XenApp suite into XenDesktop. The editions are also now aligned, so if you buy XenDesktop Platinum, you get XenApp Platinum too. This means that you're able to make use of 100% of XenApp's features for every licensed XenDesktop user. And that's still valid for delivering XenApp apps to users who are using traditional desktops -- not just XenDesktops.

But wait, there's more!

Citrix is also offering a deal in which you can trade your existing concurrent user XenApp licenses for these new all-inclusive XenDesktop licenses for a small one-time fee. In addition, if you agree to trade in all of your XenApp licenses, Citrix will give you double the amount of XenDesktop licenses. Of course, in either of these cases, you'll need one new all-inclusive license for every user because they are no longer concurrent. Whether that's a good deal in your environment depends on your specific situation and what your total user-to-concurrent-user ratio currently is.

Citrix claims that customers are getting a great value with the new XenDesktop licenses. But customers may feel that while their "value" is increasing, the cost is increasing too.

Time will tell whether this licensing change was a good move for Citrix. Citrix's two biggest competitors in this market -- VMware and Quest Software -- both offer their virtual desktop suites with the older concurrent-user licensing. So far, a lot of customers have threatened to leave Citrix for the competition. We'll have to wait and see whether anyone actually does once the dust settles.

About the author:   
Brian Madden, Independent Industry Analyst and Blogger
Brian Madden is known throughout the world as an opinionated, supertechnical, fiercely independent desktop virtualization expert. He has written several books and over 1,000 articles about desktop and application virtualization. Madden's blog, Brianmadden.com, receives millions of visitors per year and is a leading source for conversation, debate and discourse about the application and desktop virtualization industry. He is also the creator of BriForum, the premier independent application delivery technical conference.

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